Self-insurance and worksite alcohol programs: an econometric analysis

Area of Science:

• Occupational Health
• Health Economics
• Behavioral Economics

Background:

• Worksite alcohol programs are crucial for treatment and prevention access.
• Profitability of these programs varies among firms.
• The link between health insurance provision and program decisions requires investigation.

Purpose of the Study:

• To identify key determinants of worksite alcohol program profitability.
• To empirically analyze factors influencing firms' decisions on offering alcohol programs.
• To examine the relationship between employee group health insurance and program offerings.

Main Methods:

• Utilized data from the 1992 National Survey of Worksite Health Promotion Activities (N=1,389-1,412).
• Employed econometric analysis to assess the offering of Employee Assistance Programs (EAPs), individual counseling, group classes, and resource materials for alcohol and substance abuse.
• Focused on measures related to firm self-insurance versus market group health insurance provision.

Main Results:

• Self-insured firms showed a higher probability (59%) of offering EAPs compared to firms purchasing market insurance (51%).
• Unionized and larger worksites were more likely to offer alcohol programs than nonunionized, smaller ones.
• Worksites with younger workforces were less likely to offer these programs than those with older employees.

Conclusions:

• Empirical findings align with labor economics theory: self-insurance increases demand, and larger worksites reduce program costs.
• Union status and workforce age highlight the importance of considering worker preferences for fringe benefits.
• The trend toward self-insurance may enhance prevention and treatment of alcohol-related issues in the workforce.